Newsletter April 2008

As the world demand for foodstuffs rises, South American farmers are reaping in the higher sales and profits. Alberto Bressan, a soybean farmer in northern Argentina, is wary of the government’s criticism of export-oriented soy barons like himself. “We’ve always reinvested in our communities and created jobs,” said Bressan, a lifelong farmer.

In the 10 years between 1996 and 2006, the government has reported that Argentina’s soybean production has more than tripled, from 12.5 million tons to more than 38 million tons per year while the number of acres of soybean plants has more than doubled. The increasing demand for food originates in China, India and other emerging nations where the population has boomed in the past century.

While the growing soybean market is generating profits for South American countries such as Argentina, Brazil and Paraguay, the sugar cane market is also being revived. Demand for sugar cane is on the rise as the biofuels industry continues to expand and use sugar cane- sourced ethanol. Demand for meat exports and coastal farm-raised salmon is also increasing as the populations of emerging countries gain greater purchasing power.

While farmers are benefiting from rising food prices worldwide, consumers are finding it harder to procure the same amount and quality of food compared to only a year ago. The Argentine government has increased taxes on farmers’ profits, especially on soybean and other grain exports. In response to the tax hike and inflation, farmers have united in one of the biggest strikes in Argentina’s history. After a three-week strike and much dialogue with the government, strikers have agreed to suspend the strike for 30 days as negotiations take place.

Source:LA Times

PAST NEWSLETTERS:

• Newsletter April 2008
• Newsletter February 2008
• Newsletter January 2008